Robert T. Kudrle

Does Regulation Affect Economic Outcomes? The Case of Dentistry

This study examines the role of variations in occupational licensing policies in improving the quality of services provided to consumers and the effect of restrictive regulations on the prices of certain services and on the earnings of practitioners. Theory suggests that more restrictive licensing may raise prices and at the same time raise demand by reducing uncertainty about the quality of the services. This article uses unique data on the dental health of incoming Air Force personnel to analyze empirically the effects of varying licensing stringency among the states. It finds that tougher licensing does not improve outcomes, but it does raise prices for consumers and the earnings of practitioners. These results cast doubt on the principal public interest argument in favor of more stringent state licensing practices.

U.S. Policy toward Foreign Direct Investment

Foreign investment policy is an increasingly important part of overall foreign policy. The authors investigate the substance of U.S. outgoing foreign direct investment (OFDI) and incoming foreign direct investment (IFDI) policy in terms of a small set of policy values and process factors. The policy values are domestic prosperity, national autonomy, and national security. The process factors are ideological consonance, impact transparency, the diffusion and concentration of perceived costs and benefits, and the political capacity of groups and institutions. These considerations illuminate the relative stability in both areas of policy since World War II, and help to explain the changes that did take place. The paper concludes with a forecast that, despite the oft-heard prediction that economic nationalism is on the increase, U.S. policies toward foreign investment will remain much the same during the eighties as they have been Since World War II.

Theory, Policy, and Resource Cartels

Our choice of theoretical perspectives to apply to resource cartels seriously affects the questions we ask, the predictions we make, and the policy suggestions we draw. In this paper we examine the implications (and the limitations) of five perspectives for the analysis of resource cartels in general and the Organization of Petroleum-Exporting Countries (OPEC) in particular: the theory of cartels; the theory of depletable resources; coalition theory; internal politics approaches; and the theory of collective action. Three classes of actors are considered-exporting producers, importing consumers, and multinational resource exploitation firms. We gain in realism by proceeding from simple to more complicated situations by including political concerns, bureaucratic divisions, and the prospect of military coercion. Yet, we do so at the price of rigorous deductive frameworks with clear and coherent predictions.

How Middle Powers Can Manage Resource Weakness: Japan and Energy

The post-World War II world has seen the transformation of the international system from a configuration with several rival great powers into one with two superpowers and a set of lesser but still substantial powerssecond-tier states with democratic politics and mixed economies. One of the recurrent concerns of the latter has been to secure supplies of natural resources. We argue that postwar conditions point to eight elements of prudent resource policy for middle-level powers. Such states should: (i) avoid military means; (2) choose trade partners whose political interests overlap with their own and who enjoy political stability; (3) seek to create in supplier and transit countries a structure of economic interests that will make supply agreements self-enforcing; (4) diversify with respect to commodity dependence, supplier share, and transit bottlenecks; (5) tailor stockpiles to the urgency of demand; (6) exploit technology to reduce dependence and enhance bargaining advantages; (7) encourage the private sector and public enterprises to become intermediaries in the international resource trade; and (8) pursue strategic interdependence among consumer nations by creating multilateral stakes in the maintenance of normal commerce in resources. In this paper we develop a set of general prescriptions for the behavior of mid-level powers with small endowments of natural resources. We hold that states which follow these prescriptions will avoid endangering their economic performance. Indeed, they may outperform others that apparently hold an advantage in terms of greater resource endowments and military power. We use the case of Japanese energy policy to develop our prescriptions and to demonstrate their feasibility. The case has special interest because of the importance of energy resources in the world economy, Japans extreme dependence on and thus policy efforts related to-imported energy, and the vigor of the Japanese economy.

Energy R&D: in tepid pursuit of collective goods

Continued dependence on expensive imported liquid fuels puts stress on the relations among and the domestic performance of the members of OECD. Coordinated energy R&D could in principle lessen those stresses and also benefit other liquid fuel consumers. A political economy approach can help explain the tepid pursuit of this possibility in two ways. First, it can clarify the reasons for the weak collective action energy R&D record of the members of the OECD both before and after the oil events of 1973. Second, it can demonstrate and identify the nature of the undersupply of the public good of energy knowledge. The history of this area illustrates several general obstacles to the provision of public goods in realistically complex political situations. These include the uncertain and distant nature of commitments to actually deliver collective goods in the absense of self-enforcing agreements, unwillingness to jeopardize possible future private advantages, and the tendencies to link provision of particular public goods to cooperation by other parties with the provider on a host of other matters. In effect, the attempts of particular statesmen to tie energy R&D cooperation to other issues reinforce tendencies to view the choices not as ones about the level of provision of public goods, but rather as ones about national shares of private goods—economic, military, and political.

The OECD and the International Tax Regime: Persistence Pays Off

Abstract The OECD has played a pivotal role in the diffusion of tax practices since its inception: its model tax treaty grew from interwar developments and largely reflects vertical diffusion from US practices and the advice of its experts. The OECD’s Harmful Tax Practices project, begun in 1998, ultimately resulted in the Global Forum on Transparency and Exchange of Tax Information in cooperation with the G20. The Forum employs many familiar OECD techniques of horizontal diffusion. All of this is also institutional innovation that can be examined using the theory of rational institutional design. That theory suggests that any free-standing international fiscal organization (IFO) is a non-starter.

Hegemony Strikes Out: The U.S. Global Role in Antitrust, Tax Evasion, and Illegal Immigration

Both popular writing and serious scholarship suggest that “American hegemony” is very much in vogue.[1][1] This article argues against the use of the term, especially as it applies to economic matters. “American hegemony” does more than oversimplify: it distorts and seriously misleads. [1]: #fn-2

The Atlantic divide in antitrust : an examination of US and EU competition policy

How is it that two broadly similar systems of competition law have reached different results across a number of significant antitrust issues? While the United States and the European Union share a commitment to maintaining competition in the marketplace and employ similar concepts and legal language in making antitrust decisions, differences in social values, political institutions, and legal precedent have inhibited close convergence. With The Atlantic Divide in Antitrust, Daniel J. Gifford and Robert T. Kudrle explore many of the main contested areas of contemporary antitrust, including mergers, price discrimination, predatory pricing, and intellectual property. After identifying how prevailing analyses differ across these areas, they then examine the policy ramifications. Several themes run throughout the book, including differences in the amount of discretion firms have in dealing with purchasers, the weight given to the welfare of various market participants, and whether competition tends to be viewed as an efficiency-generating process or as rivalry. The authors conclude with forecasts and suggestions for how greater compatibility might ultimately be attained.

Ending the Tax Haven Scandals

States around the world appear more determined than ever to end tax haven abuse. The new U.S. administration, for example, is taking action against both major tax haven problems: corporation income tax avoidance and personal income tax evasion. Some progress may be made. This essay argues, however, that only radically new policy will likely suffice either to shore up corporate tax revenues or to sharply diminish evasion. Global formula apportionment is needed if the corporate income tax is to be preserved, and only a combination of automatic information sharing among governments and source withholding can stamp out evasion. As in most areas of international economic policy, U.S. leadership is essential.

The globalization of competition policy

The world of multinational enterprises is changing dramatically. Their complex and dynamic international context presents them with special challenges – threatening their survival on one hand, and presenting them with unprecedented opportunities on the other. In this volume, international experts analyze different aspects of the transformations in global governance: ideological variations, trade governance, competition policy and the rise of civil society. They discuss the implications for multinational–government relations, multinationals’ self-governance, relations with NGOs and issues of competitiveness.